You probably didn't notice, but last Saturday was a watershed date in the global cinema industry, one that in future years could be as significant a landmark as, say, the "big bang" on the London stock exhange: 19 March 2011 was the deadline given by the World Trade Organisation when it demanded China end its 20-foreign-films-a-year quota, and open its cinemas to outside product. Dollar signs are lighting up in the eyes of movie producers across the globe.
China is not alone in imposing limits on non-domestic films, but its quota regime is among the world's tightest. Hollywood was unlikely tolerate that, especially with the Chinese market growing at an astonishing pace. In 2005, China's box-office receipts totalled £150m; last year they were just under £1bn. Sure enough, the US lodged a complaint with the WTO in 2007.
The deadline for the lifting of the quota has now passed, but China's State Film Bureau has yet to announce what changes it will make, and local film-makers are already worrying about the increased competition from overseas. The 20 foreign titles that have previously been allowed in each year would compete with more than 500 domestic movies. Even so, they have accounted for around 45% of Chinese box-office revenues. Last year, Avatar alone grossed £125m, totally dwarfing the £65m made by China's highest-grossing domestic film ever, Let the Bullets Fly.
Albert Lee, CEO of Emperor Motion Pictures, which co-produced Let the Bullets Fly, says: "Imagine if you had 30 Avatars a year. They'd completely take over the market. The quota system helps local producers better survive against the inevitable Hollywood invasion." But Teng Jimeng, professor of film at the Beijing Language and Culture University, believes the quota is unlikely to be entirely removed this year, having discussed it with the State Film Bureau. "Any changes they introduce will be incremental," he says. Most observers expect China to simply raise the import cap to 30 films this year, then a little more each year subsequently.
But the import quota is not just intended to protect Chinese films economically – it also has cultural ramifications, preserving a national film identity. Zhao Huili, the producer behind the 2007 low-budget hit Invisible Wings, says: "It's about safeguarding local stories, not just local production companies." Many in China look to the contrasting examples of Taiwan and South Korea. In 2001, Taiwan dropped its film-import restrictions as it joined the WTO. Today foreign movies take 97% of box office revenues. South Korea, by contrast, kept a quota – 73 days a year are reserved for the screening of Korean-only films – and has fostered a flourishing domestic industry; now Korean films regularly outsell Hollywood on home soil.
For Teng, the Korean comparison is apt because of the way Korea uses the cinemas themselves as the last line of defence. "The Chinese government might have to allow 100 foreign films a year, but it can still create barriers by placing films in bad time slots – for example, at 9am. Even if movie theatres want to make money out of foreign hits, there's still the possibility of a political directive coming down from the film bureau."
Certainly, this was the case last year, when Avatar was pulled to make way for the state-backed biopic Confucius, starring Chow Yun-Fat. But, as the disappointing box-office run of Confucius shows, the power to decide the future of Chinese film ultimately lies with Chinese consumers. And they are increasingly being courted by Hollywood. This year, for example, Jay Chou – a Taiwanese pop star adored across China – was chosen to star alongside Seth Rogen in The Green Hornet, instead of someone like Jet Li, who is far more recognisable in the west, but less marketable back home.
While some are thrilled to see homegrown celebrities in demand abroad, others are less enthused. "They might be using Chinese faces and locations in China, but it's still a case of Hollywood expertise and Hollywood storylines," says Teng. "Chinese talents and resources are being drained. It's as if the Chinese film industry is being colonised."
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